The company has a capacity to manufacture 9 million coils per annum, bringing in revenues of Rs 800 crore. At present, 75 per cent of this capacity is utilised earning revenues of Rs 600 crore.
"We would require additional capacity after two years from now. In order to meet that, we are planning to start works on a new facility, which would be ready for operation in two years, in South India," said Mithun K Chittilappilly, its managing director.
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V Guard has two facilities to manufacture wires, one in Coimbatore, Tamil Nadu, and another in Kashipur, Uttarakhand. It also has a facility at Periamet in Chennai. While plans are to set up the greenfield facility in the land available at one of these two places in Tamil Nadu, it is also looking at options to set up the facility in some other state offering more incentives, he said. "We have not finalised the place yet," he added.
"Once set up, the facility will increase our capacity from 9 million coils per annum at present to 12 million coils per annum. This also means an additional revenue of Rs 200 crore to our wire business," he added. The company would require an investment of around Rs 30 crore to set up the facility, and this would be met through internal accruals.
V Guard is also looking at growing in the non-South market. Chittilappilly said sales to the non-South market had increased from 28 per cent of the total revenues during the second quarter of last fiscal to 33 per cent during the quarter ended September 30, 2014.
The company, which entered the kitchen appliances sector almost three years ago, had launched new models of mixer grinder during the September quarter this year.
It posted a growth of 32 per cent in net profit during the quarter ended September 30, at Rs 19.17 crore as against Rs 14.48 crore for the same quarter last year.
Revenue from operations stood at Rs 431.25 crore for the quarter, as compared with Rs 334.04 crore, an increase of 29 per cent.